No. 4, 2011


Oil of Russia magazine talks to Sergey Suchok, Vice President for Production Services, LUKOIL Overseas Holding Ltd.

The oil and gas industry today is one of the most innovative branches of the economy. Scientific and technical progress in oil production allows the discovery of hitherto inaccessible hydrocarbon reserves, gives new life to mature oil fields in traditional regions of production, and helps pump more oil from deep underground. Following world trends, LUKOIL is energetically introducing new innovations in its operations. The introduction of cutting-edge technologies holds a special place in the company's strategy and the foreign segment of geological exploration and production.

Q: What role do innovation and state-of-the-art technology play in LUKOIL Overseas' operations?

A: Quite a substantial role. The company's portfolio contains a growing number of technologically complicated projects (deepwater drilling off Western Africa, heavy oil in Venezuela), and without the application of innovative solutions and new technologies, it would be impossible to develop such fields. Examples of using innovative solutions that enable us to make production more economically efficient are the development of shale oil and shale gas fields, deepwater fields, oil sands, and so on. It's impossible to work in the oil and gas industry today without improving the technology.

Q: How is cooperation between LUKOIL Overseas and LUKOIL-Engineering's research and planning institutes arranged?

A:  We do our best to take advantage of our company's scientific potential in solving the extraordinary problems we sometimes encounter. LUKOIL-Engineering has assembled an impressive team of geologists, development engineers, and engineers for the modeling of reservoirs. This offers good support for the company's production units, particularly in planning the development of new fields. We thus used LUKOIL-Engineering's scientific potential in drawing up the plans for our West Qurna-2 project in Iraq at the initial stage of development, and LUKOIL-Engineering is now involved in the tender for preparing the master plan for developing the field.

Q: What methods does the company use for increasing oil recovery?

A:  Our greatest volume of output today comes from our fields in Kazakhstan and Uzbekistan. Unfortunately, most of the fields in Kazakhstan are characterized by a high level of reserve recovery and are in the third stage of operation. This means we have to use various methods of increasing the oil yield of formations in order to attain the planned values of the oil recovery factor (ORF) and economically feasible production. One of the most effective means of increasing the oil yield is the hydrofracturing of formations, which we've used successfully in production and geological exploration projects, and on terrigenous and carbonate collectors, which are characterized by very low values of permeability (so-called "tight collectors").

In Saudi Arabia, in particular, where LUKOIL has been carrying out a large-scale geological exploration project since 2004, we've conducted several hydrofracturing operations to increase the flow in both open and cased-hole wells.

Q: What is the situation with the oil recovery factor (ORF) in LUKOIL's projects abroad?

A:   You can't talk about the ORF as if it were an integrated indicator. This figure is unique to every field and depends on a great many factors: the nature of the collectors, the particulars of development, and so on. Our portfolio contains a wide variety of fields, from reservoirs of light oil with high gas content in low-permeability fractured carbonate collectors to heavy oil in disjointed formation sections containing supercollectors. For some fields, the projected ORF is on the order of 0.6, a very high figure; for some, it's no higher than 0.3, which is to be expected under difficult circumstances. In any case, maximizing the volume of hydrocarbon recovery is one of the main tasks we're faced with. Whole sets of measures are being planned and implemented annually to achieve this, including a large amount of pilot works, the testing of new technological equipment, the use of state-of-the-art methods for drilling and completing wells, and so on.

Q: This year, LUKOIL Overseas began introducing cutting-edge technologies in the area of monitoring and managing the drilling of wells. What's been the effect of introducing this technology?

A:  Yes, we've begun to follow the drilling of wells in real time on a permanent basis. So far, this is done by remote access, and we plan to open a monitoring center in the fourth quarter of this year. We've drawn up a list of wells for online monitoring; these are the exceptionally important and expensive exploratory and test wells on the Western African and Caspian Sea shelf, and at West Qurna-2. Eventually, the difficult wells in Kazakhstan and Uzbekistan will be included in the monitoring scheme.

The effect should be obvious: first of all, it's now possible to make decisions quickly. Reducing the time needed to obtain, analyze, and process information helps to minimize unproductive time and allows everyone involved in the drilling process to get reliable, identical information at all levels of management and at the same time. In addition, a system like this helps in creating a corporate data base on drilled wells, which is of great importance in analyzing and improving project solutions.

Q: LUKOIL was the first Russian company to work on Africa's deepwater shelf. What new technologies is LUKOIL Overseas using here?

A:   After the infamous incident in the Gulf of Mexico, all of our offshore operations were adjusted. LUKOIL took the accident quite seriously and drew the necessary conclusions. In planning the wells in Western Africa, we considered the possible complications that could theoretically arise in well casing and are installing blow-out prevents with additional safety systems and guarantees. We are also using the most up-to-date drilling rigs of the fifth and sixth generations. The super-modern drilling rigs Olympia, for example, now operating in our block in Ghanaian waters, was launched just this year and is essentially making its debut in our project. In our view, the technologies LUKOIL is using today meet all modern requirements for both operational efficiency, including the drilling of wells, and operational safety.


Q: In the next few years, LUKOIL plans to launch large-scale production on the giant West Qurna-2 field in Iraq. What key technological solutions will be used in this megaproject?

A:   The West Qurna-2 project is quite complicated from a technical, technological, and management point of view. The productive reservoirs contain huge fractured carbonate collectors with a high degree of dislocation. The depth of occurrence of the Yamama lower horizon is around 4,000 meters, and the oil has high hydrogen sulfide content. The field is located in a swampy area, and the depth of some sectors of the swamp is more than 20 meters. All this requires unorthodox approaches toward developing the field.

For the drilling of the field, we've developed plans for creating slant and horizontal wells, and come up with systems of smart completion (so-called "smart wells") and systems for monitoring drilling and transmitting data in real time. As to the development of the field, considering the enormous potential of the super-giant field and the correspondingly high output of the wells, we need to develop infrastructure and high throughput capability for our oil collecting and treatment systems: large-diameter oil-gathering mains, high production facilities for treating oil, and so on. With regard to the automation of production for efficient management of production facilities, we've developed the concept of a "smart field." In other words, we're using only the most up-to-date, innovative solutions.

Q: What is LUKOIL Overseas' attitude toward the development of nontraditional energy sources: shale oil, shale gas, and oil sands? What are the company's plans along these lines?

A:   It's obvious to us that the future of hydrocarbon production is associated with the development of nontraditional reserves. LUKOIL has huge hydrocarbon reserves in the Bazhenovskaya formation, distributed over the huge area of Western Siberia. We still have to find the right keys for its successful and economically feasible development.

Three years ago, we began to look for assets with nontraditional resources for possible acquisition. These were mainly in North America: oil sands, shale gas, and shale oil. The 2008-2009 financial crisis forced us to adjust our plans, but in 2010 we resumed our search on the rapidly growing and, as it's now popular to say, "overheated" market for shale hydrocarbons, and participated in a number of tenders.

It's obvious that nontraditional resources demand a special approach to make projects economically efficient. Such an approach ought to be cautious and well-considered, especially since we have little experience in dealing with fields of shale gas and oil. Our working group is actively examining different proposals in this area, and LUKOIL has allocated the funding for such efforts. Our plans call for us to compete for the possible acquisition of assets with nontraditional resources by the end of this year.       

 - Vladimir Akramovsky

All articles
Oil of Russia, No. 4, 2011
© 1998-2020, "OIL OF RUSSIA".
"OIL OF RUSSIA" magazine welcomes comments and ideas from its readers.
Letters should be sent by regular mail, fax or e-mail.
All right reserved, including right of reproduction in whole or in parts in any form.